YANCOAL AUSTRALIA(3668.HK)：PRODUCTION VOLUME IN 3Q25 AFFECTED BY UNFAVOURABLE WEATHER

Core Viewpoint - Yancoal's production declined due to rainfall, while sales volume increased due to improved shipping delays, leading to a significant drop in average selling prices (ASP) for both thermal and metallurgical coal [1][2][3] Production and Sales - Attributable production volume decreased by 9% YoY to 9.3 million tonnes in 3Q25, while attributable sales volume increased by 3% YoY, with thermal coal remaining flat and metallurgical coal rising by 14% YoY [2] - For the first nine months of 2025, total attributable production grew by 4% YoY to 28.2 million tonnes, representing 72-80% of Yancoal's full-year guidance of 35-39 million tonnes [2] Average Selling Price (ASP) - Thermal coal ASP fell by 17% YoY to A$130 per tonne in 3Q25, while metallurgical coal ASP dropped by 25% YoY to A$195 per tonne, both within the market price ranges [3] Financial Performance - Estimated revenue for Yancoal in 3Q25 is approximately A$1.48 billion, reflecting a 17% YoY decline but a 30% QoQ increase [1] - Earnings forecasts for 2025E, 2026E, and 2027E have been revised down by 54%, 49%, and 40% respectively, primarily due to lower ASP assumptions, although there is a slight increase in volume forecast due to a 3.75% increase in equity interest in Moolarben mines [1] Cash Position and Valuation - As of September 2025, Yancoal had a gross cash position of A$1.8 billion, representing approximately 24% of the current market capitalization [3] - The net present value (NPV)-based target price has been revised down by about 9% to HK$31 from HK$34, reflecting the new earnings forecast and the rollover of the valuation base to 2026E [1] Guidance and Costs - Full-year guidance remains unchanged with attributable saleable production expected to be between 35-39 million tonnes, operating cash costs projected at A$89-97 per tonne, and capital expenditures estimated at A$750-900 million [4]